The Commonwealth's low-interest loans proposal for debt-stricken farmers is poorly thought out and unfair, a Budget Estimates hearing has been told.

The Federal Government has allocated $60 million over two years for each of the states and the Northern Territory, if they sign up to the Commonwealth's Farm Finance package.

But NSW Nationals Senator Fiona Nash has used Budget Estimates to attack the Government's decision to allocate equal funds for each state.

"How am I going to feel in NSW, where there are around 43,000 farming businesses, compared with the Northern Territory that's got 522, when there's $30 million on offer for each (over two years)? How am I going to feel in NSW if I desperately wanted to access this and really needed to, and I've hit the cap?" Senator Nash said.

"What's that [equate to]? Forty-six farmers out of NSW, 0.1 per cent, compared to the Northern Territory with 522 farmers? How stupid a decision is that?"

In addition to the $420 million concessional loans package, the Farm Finance proposal would include changes to make the Farm Management Deposit scheme more accessible, 17 more Rural Financial Counsellors nation-wide, and a promise of debt mediation reform.

Federal Agriculture Minister Joe Ludwig says it's an important program that will alleviate the acute debt stress in rural Australia, and once the states sign up, the details of the package will be able to be finalised.